Full-Scale Development of the Proprietary Media Business and Its Independence as a Segment

「From the current first-quarter consolidated accounting period, we changed the business segments presented as reporting segments in light of future business developments and other factors.」

「After reviewing our reporting segments in light of future business developments and other factors, we changed the reporting segments from the previous 4 categories of Digital Content, One to One, XR and SNS to 2 categories, Fortune-Telling and Entertainment and Matching Services, from the current first-quarter consolidated accounting period.」

「In restructuring the revenue models of our existing businesses, our Group integrated the Fortune-Telling Content business and the Media business and changed the segment to the newly established Digital Content business」

「From the current third-quarter consolidated accounting period, we reorganised the Fortune-Telling Content business and the Media business and began integrating their operations and promotions. As the businesses became more similar, we determined that consolidating these segments would provide a more appropriate presentation of our Group's segments. Accordingly, we consolidated the former Fortune-Telling Content business and Media business into the Digital Content business.」

「During the current second-quarter cumulative consolidated period, advertising rates tended to decline as more companies held back on advertising amid the deteriorating Japanese economy caused by the spread of COVID-19. However, our efforts to enhance paid content on our own websites as part of building a revenue structure not reliant solely on search engines proved effective, and we posted operating income. As a result, sales in the Media business for the current second-quarter cumulative consolidated period were ¥58 million, up 30.1% year on year, and operating income was ¥1 million, compared with an operating loss of ¥1 million in the same period of the previous year.」

「During the current first-quarter cumulative consolidated period, we continued working to build a revenue structure not reliant solely on search engines. In addition to increasing advertising revenue by strengthening the operation of existing media, we enhanced paid content on our own websites. As a result, some existing media operations began to show signs of stability, and sales revenue increased year on year.」

「In the Media Business, while maintaining a focus on advertising revenue, we will work to establish a diversified revenue structure that does not rely solely on search engines by strengthening paid services on our own websites. We also plan to produce new websites during the fiscal year ending August 2021.」

「As a result, sales in the Media Business for the nine-month period of the current consolidated fiscal year were ¥96 million, up 87.2% year on year, and the operating loss was ¥20 million, compared with an operating loss of ¥21 million in the same period of the previous year.」

「During the six-month period of the current consolidated fiscal year, the business did not become profitable due to depreciation and other costs associated with the release of new media services. However, stable operation of existing media resulted in higher sales year on year and a significant reduction in the operating loss.」

「In the Media Business, the company operates sites using AI. During the first quarter of the current consolidated fiscal year, in addition to operating existing media, it produced and released 1 new media service. Although monthly earnings fell below forecast in some months due to changes in search-engine algorithms, operating losses were significantly reduced from ¥10 million in the same period of the previous year to ¥3 million as the operation of existing media stabilized compared with the same period of the previous year.」

「During the current consolidated fiscal year, in addition to operating existing media, the company produced and released 2 new media services.」

「In the Media Business, the company operates curation sites using AI. During the nine-month period of the current consolidated fiscal year, sales increased through the expansion of advertising space in existing media and diversification of the revenue structure. However, production costs for several new media services scheduled for release in the fourth quarter weighed on profit.」

「During the six-month period of the current consolidated fiscal year, in addition to expanding advertising space in existing media, the company focused on establishing a diversified revenue structure for the new media service 「占いプラス」, released in December.」

「In the Media Business, the company operates curation sites using its AI business. During the first quarter of the current consolidated fiscal year, in addition to releasing 「コイゴコロ」, a new media service incorporating AI analysis, the company focused on establishing new revenue models.」

「During the current consolidated fiscal year, while generating stable earnings centered on advertising revenue through operation of 「カナウ」, the company worked on developing 「コイゴコロ」, a new media service incorporating AI analysis of the extensive fortune-telling consultation data that is one of the company's strengths. 「コイゴコロ」 was released in September 2018.」

「Going forward, we will continue working to increase user engagement and the value per site by increasing the number of pages, reviewing site structure, and improving accessibility, while also seeking to increase earnings by introducing new content and services.」

「The Media Business, which began full-scale operations from the second quarter of the current consolidated fiscal year, became profitable on an operating basis in January, and the company is strengthening its development into an earnings base during the current fiscal year.」

「The operation of the company's own media sites was part of the fortune-telling content business in the previous consolidated fiscal year. However, as its importance in the business plan increased, it was separated as an independent business from the current consolidated fiscal year and included in the Media Business segment.」